Lana Payne, Unifor's national president, says zero tariffs is the only acceptable resolution if Canada wants to protect its auto industry from being forced out by unfavourable costs.Adrian Wyld/The Canadian Press
As trade talks with Washington continue, the head of Canada’s largest private-sector union says the country must not agree to any deal that includes tariffs on automobiles.
Lana Payne, national president of Unifor, says U.S. President Donald Trump’s 25-per-cent tariffs on imported cars has put every Canadian automotive plant at risk of production cuts and job losses – even permanent shutdown – unless negotiators find a way around the levies.
“There’s always the concern if we’re in a place where the tariffs continue and we’re unable to get to an agreement with the United States, then every [automotive] facility in Canada becomes vulnerable,” Ms. Payne said. “That’s the problem.”
Ms. Payne, in an interview with The Globe and Mail, said zero tariffs is the only acceptable resolution if Canada wants to protect its auto industry from being forced out by unfavourable costs.
“We cannot get into a situation where a deal includes normalization of tariffs in the auto industry, because that will result in one thing and one thing only, and it’ll be a slow bleed of investment from our country,” she said. “We will wake up one day in which we will have a much diminished industry in Canada, if one at all.”
Canadian vehicle production set to drop as U.S. tariffs weigh on sector
Kirsten Hillman, Canada’s ambassador to the United States, has been leading trade talks with Washington officials, trying to meet a July 21 agreement deadline set by Prime Minister Mark Carney and Mr. Trump at the G7 meeting in Kananaskis, Alta., last week.
Mr. Trump said he still prefers tariffs and called Mr. Carney’s trade position “complex,” but expressed optimism the two sides could reach an agreement.
Ms. Hillman, in a CBC interview aired on Sunday, said it is too soon to say if the U.S. will budge from its pro-tariff position and allow goods to flow between the countries mostly duty-free as outlined in the pact Mr. Trump agreed to in his first term.
“I think that ultimately we believe that open and stable trade are what we need for Canadian workers, for Canadian businesses. That’s our goal, open and stable trade,” Ms. Hillman said. “That’s what we’ve had. That’s what’s led to an enormous success for the U.S.”
Since Mr. Trump began talking about tariffs on Canadian-made cars, there have been thousands of layoffs and production cuts at Ontario’s auto plants, including General Motors’ factories in Oshawa and Ingersoll, and Stellantis NV’s Windsor facility. The tariffs went into effect in April, accompanied by levies on steel and aluminum.
Two auto plants, Ford in Oakville, Ont., and Stellantis (STLA-N) in Brampton, Ont., were idled for retooling before Mr. Trump took office, and are seen as particularly vulnerable to automakers’ shifting investment in response to the tariffs.
Oakville’s revamp continues, but Brampton’s is on hold.
Ms. Payne, who represents more than 40,000 workers in the Canadian auto sector, says she has been talking frequently with the heads of automotive companies, urging them to preserve their Canadian production, employment and sales market share in the face of tariffs.
“I’ve been, I would say, cajoling, charming, and doing everything that I can to convince them that long-term decisions made in this moment would be short-sighted,” Ms. Payne said.
General Motors (GM-N) and Ford have said the U.S. tariffs will cost the companies billions of dollars as prices rise and sales fall. GM said last week it will spend US$4-billion over the next two years at three U.S plants as it shifts production and investment to the U.S.
Ontario plants that make vehicles that are produced in the U.S. or Mexico are also vulnerable to the movement of production. These include Honda in Alliston and GM in Oshawa.
U.S. consultancy AutoForecast Solutions says output at both plants is set to fall over the coming years.
General Motors has already said it will eliminate one of three production shifts at the Oshawa Silverado plant by the fall, laying off 700 employees. GM recently hired hundreds of people at its Silverado plant in Fort Wayne, Ind., boosting production by 50,000 trucks a year.